PARTICIPATION of small investors in an initial public offering (IPO) improved following the Philippine Stock Exchange, Inc.’s (PSE) launch of the PSE Electronic Allocation System (PSE EASy).
In a statement, the PSE said 94% of the local small investor (LSI) tranche for Kepwealth Property Phils, Inc.’s (KPPI) IPO was taken up, 683% higher than the average 12% take-up seen in previous IPOs.
The PSE’s LSI program allots 10% of an IPO to LSIs, where investors can subscribe to a minimum board lot up to P100,000.
KPPI is the first company to use the newly launched PSE EASy system, which allows investors to register online so they can subscribe to an IPO.
“The favorable result of PSE EASy’s pilot run attests to the efficiency of the online platform as it saw the participation of local small investors from 25 provinces across 12 regions in the KPPI IPO,” PSE President and Chief Executive Officer Ramon S. Monzon said in a statement.
“This is the first IPO where investors from as far north as Ilocos Norte to investors down south in Zamboanga invested in an IPO.”
LSIs previously had to physically go to designated kiosks at the PSE office or select malls in Metro Manila, present identification cards to get a Share Subscription Form, and personally bring the form to their respective stockbroker to be acknowledged. They then have to bring the form back to the kiosk for payment.
The PSE said the “tedious” requirements had discouraged LSIs to participate in IPOs in the past.
“We are optimistic that upcoming IPOs will also see a brisk take-up from LSIs, especially since the KPPI IPO proved to be very profitable for the small investors, with KPPI rising by 42% on its first trading day from its IPO price,” Mr. Monzon said.
Two companies are currently in the line-up for a potential maiden offering this year, namely coconut products manufacturer Axelum Resources Corp. and Villar-led AllHome Corp. Both have been cleared by the Securities and Exchange Commission and are now awaiting approval from the PSE. — Arra B. Francia